WEDNESDAY'S PERSONAL FINANCE STORIES

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CBSMarketWatch

We make a big deal of picking stocks, bonds and mutual funds. Making those picks, and touting them, is big business.

But what if all that effort, and all that money we pay for it, is next to useless when it comes to earning returns? Where would all the newsletter writers, active mutual fund managers and stock analysts be then?

The real stars of your portfolio may not be the individual stocks and funds at all, if you look at academic studies of pension-fund investment. What you should be looking at for five-star performance is your mix of asset classes.

Paul Merriman reviews the investment literature and introduces his own star-rating system for asset classes in his column. Find out what classes earn five-stars in his book, plus read why Medicare may be a more pressing problem than Social Security and see if you can still catch the low-rate mortgage train, on Wednesday's Personal Finance pages.

Yes, asset classes are an important determinant of performance. But they aren't much fun compared to owning companies themselves. Who doesn't like thrill rides, after all?

Steve Kerch, personal finance editor

Rating asset classes by the star system

It's finally time for me to jump into the star-ratings game, even though I've been critical in the past of rating systems that assign stars to stocks and mutual funds. Lots of people like simple ratings and rankings. So I am presenting the first-ever Merriman Star Ratings. These don't rate individual stocks or individual mutual funds. Instead of that, I'm going to rate asset classes, because that is the most important factor that determines investment performance. See Paul Merriman

Medicare is an imminent problem too

Alan Greenspan stoked an old debate when he warned a Congressional committee that future Social Security benefits would have to be cut to guard the federal budget's long-term health. Lost in the hullabaloo was the Federal Reserve Chairman's warning of a fiscal danger that dwarfs Social Security -- Medicare. See full story

Bond analysts weigh taking on more TIPS

Four-decade-low consumer prices may just signal a perfect time to jump on specialized bonds that offer inflation protection. See full story

Condos suit more lifestyles, but prices raise caution

Condominiums can be attractive to first-time home buyers looking to get a piece of the American dream or older homeowners wanting to shed some maintenance demands, but they're often riskier investments than single-family homes. See Spring Home Buying/Selling

Mortgage train is back in the station

When the weaker-than-expected jobs report came out last week, most observers were thinking about its impact on the economy. They should have been thinking about its potential effect on their mortgage payment. See Chuck Jaffe

Senators turn out to be shrewd investors

Your senators came to Washington to do good. And they apparently have done very well indeed. That's the shocking conclusion to emerge from a recent study of the financial disclosure reports that U.S. senators are required periodically to file. See Mark Hulbert

Flap over U.S. jobless surveys may be overblown

President Bush's re-election could hinge on what voters think about the job market. Democrats have been hammering Bush for months, saying he has the worst economic record since Herbert Hoover presided over the Great Depression. Republicans counter that the economy is expanding at the fastest pace in 20 years and that hiring isn't nearly as rare as Democrats say. See Capitol Report

Survey: Employers favor health-insurance reforms

Many employers value health insurance as part of their compensation packages and are open to proposals that would require them to expand coverage, according to a new survey. See full story

Tax break and a cleaner-running car

Green could have a double meaning for environmentally conscious motorists at tax time. See Daily Tax Tip

Brazos Micro Cap seeks small, overlooked stocks

Many small-cap stock investors try to uncover hidden opportunities. Brian Gerber delves even deeper, searching for companies that even niche players overlook. See The Stock Pickers

Calculating your child tax credit

Recognizing that children can be a financial burden as well as a personal joy, the federal government in 2003 expanded the child tax credit from $600 to $1,000. But when you sit down with your tax forms this year, remember that many Americans have already received a portion of their child tax credit. See Marshall Loeb's Daily Money Tip

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